Question

If a firm operating in monopolistic competition is producing a quantity that generates MC < MR, then the marginal decision rule tells us that profit: Select one: a. can be increased by decreasing production. b. can be increased by increasing production. c. can be increased by increasing the price. d. is maximized only if MC

Answer 1

Most times, the Maximized-Profit in a Monopolistic Market must be determined in any market economy. If a firm operating in monopolistic competition is producing a quantity that generates MC < MR, then the marginal decision rule tells us that profit can be increased by decreasing production

• It has been said that monopolistic market, an organization often maximizes its total profit by equating marginal cost to marginal revenue and solving for the price of one product and the quantity it must produce.

A firm that is monopolistically competitive often maximizes profit by creating the quantity of output associated with marginal revenue equals marginal cost.

The profit-maximizing quantity of output is often shown as represented q0.

Conclusively, If the firm creates goods at a greater quantity, then MC > MR, and the organization can make higher profits by reducing its quantity of output.

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